Singapore flag Singapore: Economic and Political Overview

The economic context of Singapore

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Singapore's economy is characterised by excellent finances and a high degree of openness, with the country being highly dependent on international trade. However, GDP only grew 1.3% in 2019, the worst the slowdown in 10 years at the time, mainly due to the trade war between the US and China and to a cyclical global downturn in the electronic sector. Due to the COVID-19 pandemic, the country registered a negative GDP growth of -5.4% in 2020 before a strong rebound at +6% in 2021. The latest IMF forecast is expecting a 3.2% rate in 2022 and 2.7% in 2023, subject to the post-pandemic global economic recovery. Growth factors include Singapore business-friendly regulatory system, 176.2% of GDP in exports and domestic demand.

The country's government balance was positive at 1.8% of GDP in 2019 but dived to -9.6% due to the impact of the COVID-19 pandemic on public spending before a come back to -2.4% in 2021. It is expected to come back to -0.3% and then -0.2% in 2022 and 2023 (IMF, October 2021). Singapore's gross debt remained high at 137.9% of GDP in 2021 and is projected to increase slightly to 139% in 2022 and 140.2% in 2023. While public debt is high, financial assets held by the country more than compensate for it.  As for the previous year, inflation is well under the 2% target fixed by the central bank. It even turned negative in 2020 (-0.2%) before reaching 1.6% in 2021. The IMF is forecasting inflation of 1.5% for 2022 and 2023. The Monetary Authority of Singapore is expected to maintain its policy in 2022. Economic challenges include slower exports due to Chinese economic slowdown, the U.S.-China trade war, decreasing global demand for electronics (19.7% of exports), a lagging construction sector, and a tight monetary policy, according to Coface.

In 2022, the country’s most immediate challenge remains related to the economic, social and public health impacts of the COVID-19 pandemic. Although per capita wealth in Singapore is amongst the highest in the region, unemployment has appeared due to structural economic changes (outsourcing of low-skilled work) and the COVID-19 crisis. Singapore’s annual average unemployment rate reached 2.7% in 2021 and is expected to slightly decrease to 2.5% in 2022 and 2.4% in 2023 despite the negative economic impact of the COVID-19 (IMF, October 2021). Singapore ranked the best country in the world in human capital development in 2021 (World Bank, 2022). According to Labour Market Advance, Singapore made improvements in total employment and local employment towards the end of 2020. Singapore’s labour market will bottom out by 2022, but according to analysts, the recovery will be uneven and may widen the national income gap. Social challenges include rising income inequality and social discontent caused by overpopulation, high competition for employment and housing, lack of skilled labour, an ageing population, and distrust towards immigration.

Main Indicators 202020212022 (e)2023 (e)2024 (e)
GDP (billions USD) 345.29396.99423.63447.16470.11
GDP (Constant Prices, Annual % Change) -4.17.6e3.02.32.6
GDP per Capita (USD) 6072798488
General Government Balance (in % of GDP) -7.9-2.3-0.5-0.50.6
General Government Gross Debt (in % of GDP) 152.0159.9141.1140.0139.9
Inflation Rate (%) -
Unemployment Rate (% of the Labour Force)
Current Account (billions USD) 58.1471.9354.1456.0157.75
Current Account (in % of GDP) 16.818.112.812.512.3

Source: IMF – World Economic Outlook Database, October 2021

Note: (e) Estimated Data

Main Sectors of Industry

Singapore's economy is based on electronics, petrochemicals, trade, finance, and business services. The agricultural sector is almost non-existent except for cultivation of orchids, vegetables and fish for aquariums. Its contribution to GDP (0%) and employment (0.7%) is negligible (World Bank, 2022), although the country intends to increase food resilience by developing a new aquaculture centre. The sector is registering regular growth rates since 2019. Singapore does not have mineral resources.

Singapore's economy is highly industrialised. The industrial sector represented 24.4% of GDP and employed 15.2% of the active population in 2021 (World Bank, 2022). Electronics and petrochemicals dominate the industry, which also includes biomedical sciences, logistics, and transport engineering (GuideMe Singapore).

The services sector contributed 70.9% of GDP and employed 84.1% of the active population in 2021 (World Bank, 2022). It is dominated by trade, business services, transportation, communications and financial services. As a regional commercial hub, the Port of Singapore is one of the most important in the world. It ranks second in total volume of container transshipment traffic after Hong Kong. The growth in transport and storage services, health and social services sectors did not compensate the decline in the recreation and personal services, and the education services.

The COVID-19 pandemic has had a powerful impact on the global economy since 2020. Nevertheless, the global recovery continues, even if the momentum has weakened towards the end of 2021 and uncertainty has increased as the pandemic resurged, leaving lasting imprints on medium-term performance. The surge in global inflation has investors fretting about future growth, but many economists say price surges will subside, making way for 4.7% global GDP growth in 2022 (International Monetary Fund - IMF, 2022 & Morgan Stanley, 2021). The impact of the pandemic appears to have affected both sides of most sectors and markets in Singapore for the second year in a row - demand disruptions having run up against supply problems - making the short-term outlook uncertain for agriculture, industry and service sectors.

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 0.0 15.6 84.4
Value Added (in % of GDP) 0.0 24.9 69.4
Value Added (Annual % Change) 10.8 13.3 5.2

Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.


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Indicator of Economic Freedom


The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.}}

World Rank:
Regional Rank:

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation


Business environment ranking


The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

World Rank:

Source: The Economist Intelligence Unit - Business Environment Rankings 2021-2025


Country Risk

See the country risk analysis provided by Coface.

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Latest Update: January 2023

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